South African Macadamias Performed Well in 2022 Despite Tough Year for Nuts

Macadamia Kernel

Raw Macadamia

South Africa

Market & Price Trends

Published Feb 7, 2023

South Africa’s macadamia production in 2022 topped 70,000 mt (in-shell) according to the latest industry estimates. Production was boosted by good rains early in the season, and an increase in the area of bearing trees. South Africa’s macadamia exports were resilient throughout the year, in contrast to most other nuts. Exports were the second highest on record in terms of volume reaching as much as 22,444 mt on a kernel basis. The majority of exports were directed to China, where consumers with high incomes continued to purchase the premium nut, despite increased living expenses. As South Africa is expected to have another potentially record-breaking production year in 2023, China remains a key market for its macadamia exports.

Latest Crop Estimate Tops 70,000 mt

Macadamias South Africa (SAMAC) raised their 2022 crop estimate to a remarkable 70,139 mt (in-shell) or 22,444 mt (kernel basis). The estimate, based on an industry survey, was raised several times during the year and was 12,414 mt higher than the initial forecast. This represents a 31.5% increase from 2021 and a record-breaking 10,000 mt higher than the previous record of 59,050 mt in 2019. The increase in production was driven by good rains, favorable production conditions, and a rise in bearing trees. In 2021, South Africa had 56,368 ha of established macadamia orchards, with new areas planted surpassing 5,000 ha for the fourth consecutive year, indicating potential for future growth. Macadamia growing regions have again experienced good rains during the flowering and nut-fill stages, and 2023 is set to break production records once more.

Large Quantities Exported, albeit at Lower Price

South Africa's macadamia exports were resilient during most of 2022. These exports, calculated on a kernel basis, reached a substantial 21,555 mt, valued at USD 277 million. This made it the second-highest year for volume exports, behind only the 23,043 mt exported in 2019. However, in terms of value, it ranked as the fourth-best year due to the lower price received for macadamias. While the price is below what suppliers hoped for, South Africa was able to sell the majority of the crop and clear out storage space before the next crop comes in, already starting next month. Many other nut-producing countries are stuck with an oversupply of nuts and subsequent storage issues as global demand has fallen. Macadamia demand has remained strong compared to other nuts, despite being one of the most expensive commercial nuts. Macadamias often retail at three to four times the price of almonds (on a kernel basis). Consumers of macadamias in China, who are typically high-income households, have been less affected by rising living costs, making demand for this nut more resilient. In contrast, demand in the US and Europe has been more sensitive to changes in price.

Source: South African Revenue Service (SARS)

Exports to China Increased, but Decreased to the US and Europe

Over the past 10 years, the top destinations for South African macadamias have alternated between the US and China, with Europe close behind. However, in 2022, China emerged as the clear leader, accounting for 40% of the value of South African macadamia exports, compared to 28% the year before. This increase in exports to China occurred despite the country's own production increase from 32,500 mt in 2021/2022 to 62,500 mt in 2022/2023 on an in-shell basis. The US and Europe’s market shares dropped from 31% to 29% and from 22% to 19% respectively. With declining demand from Europe and the US, the South African macadamia industry may continue to target high-income consumers in China in 2023.